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But as the planning process has dragged on and the rebuilding been delayed, a question looms over New Zealand's second-largest city: Will people and businesses return when the rebuilding is finally completed?

About 50,000 people and 6,000 businesses were forced to relocate after the quake on Feb. 22, 2011. They have been living and working in temporary quarters—taking over office space in warehouses, and using fitted-out shipping containers and converted homes as offices.

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The remains of a building on a closed street in the former central business district in Christchurch in March.
Reuters

To be sure, many people are expected to return. Government departments and large international firms are looking for space and say they are committed to supporting the city, founded 150 years ago by English settlers and named after an Oxford University college.

But the longer some businesses and people have been kept away, the deeper their roots have grown in the areas where they have relocated. Insurance proceeds increasingly are being depleted, and companies are signing long-term leases in new locales.

Also, inner-city commercial property that is being rebuilt is expected to be more expensive than the temporary quarters companies have taken. And many workers remain traumatized by the horror of the earthquake.

Law firm Cavell Leitch was in the 17-story Claredon Towers, which suffered an internal stairwell collapse, forcing the firm's 80-person staff to evacuate by cranes. Cavell Leitch relocated to a low-rise building in a business park about 10 minutes from the inner city and signed a six-year lease there. "What we need is a place where our clients want to come and our staff want to come to…. We are in the best place to be," says Julian Clarke, managing partner at the firm.

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Further damage in the city's downtown
Bloomberg News

After the quake, more than 10,000 homes were declared uninhabitable, and parts of the downtown area remain barricaded for demolition. The rebuilding has been delayed by continued aftershocks, red tape and battles over insurance payouts.

The government's rebuilding plan for a modern, low-rise city includes generous amounts of green space, a convention center, library and new sports complex. "What we have to appreciate with Christchurch is that we're not going back to where we came from. We are going to something new, " says Peter Townsend, chief executive of Canterbury Employers' Chamber of Commerce.

Government agencies initially expected the rebuilding to be well under way by early 2012. While some planners say businesses and restaurants may be able to start returning by year-end, the New Zealand Treasury now expects residential commercial and infrastructure work to peak in 2016—and take well over five years to complete.

Antony Gough, the developer of a restaurant-and-bar precinct planned for the inner city, says he thinks there is a "huge risk" that Christchurch dwellers may not return. "The government locked the city down and stopped us going in there. It's pretty hard to rebuild your city when the army is in there with gates and barricades," Mr. Gough says.

Also, financing hasn't been lined up for all the projects. Much of the reconstruction will come from insurance payments, and the New Zealand government's bill is $13 billion.

Some foreign investors are choosing to stay. Singapore-owned Hotel Grand Chancellor is rebuilding a low-rise hotel to replace a now-demolished 26-story building that for weeks teetered on the brink of collapse after the quake.

But the government has been moving slowly in finding foreign investors for projects such as a redevelopment of the hospital and the $425 million convention center. So far, no contracts have been awarded for the development of those projects, but talks are continuing.

The New Zealand government and Christchurch authorities are attempting to woo Chinese investment into the city. Both New Zealand Prime Minister John Key and the city's Mayor Bob Parker broached the subject on recent trips in the region.

"There's interest to look [from foreign investors], but trying to get their head around the Christchurch market and understanding that and whether they should invest—that's the challenging thing," say Mark Macauley, managing director at CB Richard Ellis.CBG1.01%

Rents in the rebuilt city center are expected to rise sharply to offset the high cost of building offices on a speculative basis. Some small technology firms in the temporary Enterprise Precinct and Innovation Campus won't be able to afford the inner city even if they want to be there, says Wil McLellan, founder of Stickman Studios.

"Most people are passionate about being part of the revitalization of the city, but we might be forced to move out to the outskirts because of costs," says Mr. McLellan. He says the challenge is, "How do we create an affordable city?"

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